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Builders' insurance - from tool cover to public liability

Working as a builder comes with risks – from having your tools stolen to being sued by a client. But the right builders' insurance can protect you, so you can focus on the job at hand.
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Last updated
December 13th, 2023

What will builders’ liability insurance cover?

Builders’ liability insurance protects you should an unfortunate incident occur where you’re held responsible for injuring other people and damaging their property. With it in place, you’re protected from claims for compensation, damages, legal fees and loss of earnings. 

Some of the events it’ll protect you from are:

  • One of your diggers ruptures a water pipe or optical fibre cable serving an adjacent property

  • Roof tiles on a roadside building you’re working at slip and injure a passerby

  • Bricks from a wall you’re taking down tumble onto a car that’s parked on a neighbouring driveway

What is builders' insurance?

Builders' insurance is an umbrella term for the sorts of cover that can protect you financially if you're working in the UK construction sector.

And there are plenty of risks - from clients suing for jobs they don't think have been done properly, to accidents on the job. Even loss or damage to tools and equipment you bring with you can be covered.

The right building trade insurance policy can cover you against all of this at once, or you can pick and choose between different cover options depending your needs. You could also buy elements, such as tool cover as standalone policies.

What sorts of insurance should builders have?

Public liability insurance

Public liability insurance covers claims for damage caused by your business to a third party or their property. For example, if you damage a neighbouring property while working on a job or a member of the public trips over a ladder.

Tool cover

The right tools insurance covers the cost of repairs or replacements if your tools are lost, damaged or stolen. Plant equipment, such as lawnmowers and diggers, are typically included.

Employers' liability insurance

While public liability insurance covers claims from third parties, employers' liability protects you if a member of staff, permanent, temporary or subcontracted, makes a claim against you for a work-related injury or illness. 

If you have staff, other than immediate family members, you’re legally required to have at least £5million worth of this cover. You must display your employers’ liability insurance certificate either at your office or on your website.

Professional indemnity insurance

Professional indemnity insurance can cover your legal fees and compensation costs if a client claims they’ve lost money due to mistakes in your work. For example, you agree to complete a shop overhaul by a specific date, yet are late, meaning the client can’t open for business on time.

Personal accident cover

Getting hurt can put the brakes on a builder's ability to earn money. But, with personal accident cover you can ensure wages lost because you are laid up with a back problem, for example, are paid.

Contract works cover

Contract works insurance protects you if something beyond your control - for example theft, fire or wind damage - delays the completion of a job.

Stock cover

Building materials can be expensive - and that's what stock cover is there to protect. It means your wood, paint, bricks, slates, tiles and similar materials are covered against theft and other potential disasters.

What sorts of insurance should builders have?

Public liability insurance

Public liability insurance covers claims for damage caused by your business to a third party or their property. For example, if you damage a neighbouring property while working on a job or a member of the public trips over a ladder.

Tool cover

The right tools insurance covers the cost of repairs or replacements if your tools are lost, damaged or stolen. Plant equipment, such as lawnmowers and diggers, are typically included.

Employers' liability insurance

While public liability insurance covers claims from third parties, employers' liability protects you if a member of staff, permanent, temporary or subcontracted, makes a claim against you for a work-related injury or illness. 

If you have staff, other than immediate family members, you’re legally required to have at least £5million worth of this cover. You must display your employers’ liability insurance certificate either at your office or on your website.

Professional indemnity insurance

Professional indemnity insurance can cover your legal fees and compensation costs if a client claims they’ve lost money due to mistakes in your work. For example, you agree to complete a shop overhaul by a specific date, yet are late, meaning the client can’t open for business on time.

Personal accident cover

Getting hurt can put the brakes on a builder's ability to earn money. But, with personal accident cover you can ensure wages lost because you are laid up with a back problem, for example, are paid.

Contract works cover

Contract works insurance protects you if something beyond your control - for example theft, fire or wind damage - delays the completion of a job.

Stock cover

Building materials can be expensive - and that's what stock cover is there to protect. It means your wood, paint, bricks, slates, tiles and similar materials are covered against theft and other potential disasters.

Do builders legally need insurance?

If you employ anyone other than direct family members and bona-fide sub-contractors, you’re likely to need employers’ liability cover - or risk a £2,500 a day fine. 

All the other types of insurance are optional. Of course, that's only from a legal perspective, your clients might well disagree.

Many clients will require you to have insurance for builders. It reassures them that you are the right firm for the job. 

Professional bodies will also sometimes require proof of public and professional indemnity cover to become a member or get accreditation.

What does builders' insurance cost?

Because you can mix and match different coverage options for builders' insurance, what you pay each month depends on what you choose.

To help you get a picture of what other people are paying, we got in touch with our partner Superscript for a few real-life examples of what people are paying to protect their businesses.

  • Rahul - a self-employed builder from Luton with an annual turnover under £50,000 - was quoted £11.65 a month in July 2022. His quote was for public liability insurance (£1million limit) and employers' liability insurance (£10million limit).

  • James - a sole trader builder from Newcastle-upon-Tyne with an annual turnover under £50,000 - was quoted £23.52 a month in November 2022. His quote was for public liability insurance (£1million limit), employers' liability insurance (£10million limit) and plant and machinery cover (£5,000 limit).

  • Siobhan - a building business owner from West London, with an annual turnover up to £100,000 - was quoted £50.87 a month in January 2023. Her quote was for public liability insurance (£1million limit), business stock cover (£5,000 limit), contract works cover (£100,000 limit) and commercial legal protection (£100,000 limit).

How to get cheaper builders' insurance

Decide what cover options you want

Work out what you'd like to be covered for. For example, you won’t need employer's liability cover if you're self-employed and work alone.

Decide on your cover levels

How much public liability cover do you need? What will it cost to replace your tools? While underestimating could leave you in the lurch, there's no point paying for more cover than you need either.

Check your policy excess

The excess on a policy is how much of any claim you have to pay yourself. A bigger excess can mean cheaper quotes, but will mean you have to pay more if you do claim.

Learn more about our business insurance partner

Superscript Logo Full 2x

We qualify, quantify and offer insurance using data, analysis and technology, and we serve a wide range of business types — from dog walkers and dieticians, to landlords and locksmiths. Enro Ltd t/a Superscript is authorised and regulated by the Financial Conduct Authority.

Why Superscript?

We make it quick and easy to find, buy and manage your business insurance.

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Customisable cover for 1000s of business types
Superscript will help you find the different types of cover that are right for your business.
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Adjust your cover as you grow
Amend your cover with no admin fees, to address your evolving needs as your business grows.
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Simple claims process
Our customer portal allows you to enter the details we need to get your claim processed.

FAQs

What information do you need to apply for builders' insurance?

The fundamentals of what you need are your name, address and the sort of work you do. Insurers also like to know how large your operation is - so might ask for annual turnover and staff numbers - as well as details of any past claims you've made.

Are tools included in builders' insurance?

The option to include tool cover is a feature of most builders' insurance policies. However, if that's all you're worried about, tool cover can be bought as a standalone option.

How long does building insurance last?

Many builders' insurance policies are set for 12 months, however flexible options are also available. These let you add in extras or increase or reduce your cover levels on a month-by-month basis.

What type of builders are covered by builders' insurance?

You don't have to be in charge of a job to take out builders' insurance. Everything from contractors, hod carriers, commercial builders and house builders can find cover. Check the terms and conditions of your policy or speak to your insurer if you need more details.

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About the author

James Andrews
James has spent the past 15 years writing and editing personal finance news, specialising in consumer rights, pensions, insurance, property and investments

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